That's a frustrating situation.

#1: Not sure. It sounds like you didn't use any of the ticket other than your first segment to your YVR connection? In that case, you should be able to get it put into a Travel Bank credit ... although that might be complicated by the fact that you didn't notify WestJet until well after the second leg was cancelled (i.e. you told someone to cancel the ticket "next morning", as you said). My hunch is a Travel Bank credit is your best outcome. I doubt you'll get a refund.
#2: No, they won't compensate you for a fare difference if you buy a flight on another airline. As you said, no airline will.
#3: They gave you $250 for a hotel. (That's surprisingly generous, IMO, for an airline-paid airport hotel -- even in an expensive hotel city like Vancouver.) They won't give you any more just because you chose something more expensive.

Your best bet for recovery here is your travel insurance. I hope you had some. Relying on the good graces of any airline to cover your costs when plans get disrupted isn't going to help much.